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DTH Market - India - Sample

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"The Direct to Home (DTH) market in India has been growing steadily but continues to be a niche segment. Since its inception, DTH service has established its presence on a pan-India basis and is dominated by the northern and western regions. The growing middle-class and rising disposable income coupled with the rising number of television households over the years has assisted growth. Demand for enhanced viewing experience and various interactive services have been attracting investments in this market.

The report begins with an introduction to DTH and its growth story. An overview of the DTH market has been given including figures for the market size, segmented pay television subscriber base and the distribution of DTH across television households. Major geographical regions have been marked. This section also highlights the revenue model adopted by players, the focus areas for players towards expanding revenues as well as the cost structure.

The drivers and challenges explain the factors influencing growth of the industry including the growing middle-class and rising disposable income, increasing television penetration and sale of LCD monitors, price war and different package options which has been attracting consumers and the advantage over traditional cable operators. The key challenges identified encompass the acquisition of a share of the cable driven market and facing the new age IPTV, TRAI’s content guidelines, demand supply gap for transponders in a 7 player broadcast market and the cap on foreign investments.

Key characteristics of the market has been highlighted covering technological innovations, shift from price war to offering exclusive value added services, combined retail of LCD and DTH connections and partnerships with movie distributors. The major government regulations such as taxation, custom and excise duty as well as tariff regulations have been mentioned.
Competition section provides a summary of the competitive scenario including the segmented market share. It also includes profiles of the major players in the market. The section includes a brief company overview, various packages offered, business highlights and interactive services provided by each player."

Published in: Business, Economy & Finance
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DTH Market - India - Sample

  1. 1. DTH Market – India December 2009
  2. 2. Executive Summary Market is valued at INR XX bn in 20-- - -- and projected to reach INR YY bn in 20-- - -- Market Estimated subscriber base of U mn, expected to reach V mn in the next w years Current overall share of DTH households among total TV households of India is pegged at a% LE Drivers: Challenges: Growing middle-class and rising Getting a share of the cable driven market and Drivers & disposable income MP Increasing television penetration and sale facing the new age IPTV Trapped in TRAI’s content guidelines A Challenges of LCD monitors Demand supply gap for transponders in a 7 S Price war and different package options attracting consumers Advantage over traditional cable operators player broadcast market Cap on Foreign Investments Technological Innovations Trends Shift from price war to offering exclusive VAS Combined retail of LCDs and DTH connections Partnerships with movie distributors Company 1, the first company to enter is the largest player, controlling ~t% market share Competition Steep competition has led to a surge in advertising spend to improve penetration Due to growing number of players in the market, Average Revenue Per User (APRU) will decline owing to price war and discounts DTH MARKET - INDIA.PPT 2
  3. 3. •Market Overview •Drivers & Challenges •Trends •Regulations •Competition •Key Developments DTH MARKET - INDIA.PPT 3
  4. 4. DTH industry in India has looked upbeat in recent years but remains a niche segment Overview Segmented Pay TV Subscriber Base •Estimated market value of INR XX bn in 20--; Type 1 expected to reach INR YY bn at the end of 20-- Subscribers in mn Type 2 LE 100 Type 3 •In the Indian Pay-TV market, DTH penetration h3 g3 h2 is only a% (June 09), reaching U mn out of V 80 g2 f2 f3 P 60 d2 e2 mn paid subscribers 40 M d1 e1 f1 g1 h1 •Current overall share of DTH households 20 at b% SA among total TV households of India is pegged •c% of DTH subscribers reside in rural areas and towns with a population under 1 mn and is 0 2006 2007 2008 Distribution across TV Households (HH) 2009e 2010e largely dominated by free-to-air service HH (%age) Type 1 •The market has 6 private broadcasting Type 2 80 companies namely Company 1, Company 2, 60 Company 3, Company 4, Company 5 Free to Air operator – Company 6 40 l1 m1 n1 o1 p1 New entrant: Company 5 in May 20-- 20 n2 o2 p2 0 l2 m2 2006 2007 2008 2009e 2010e Source: DTH MARKET - INDIA.PPT 4
  5. 5. Overall cost structure in the DTH Market and the breakdown of the subscriber acquisition cost Overview Subscriber Acquisition Cost • Programming cost is the largest cost for a DTH Parameter Cost (INR) operator LE Determined as a proportion of subscription revenue that P1 C1 the operator collects from subscribers P2 C2 by FY ’-- MP • Growth in subscriber base is expected to lead to a fall in advertising expenditure to a% of overall revenues P3 P4 C3 C4 SA • Break-even point is estimated to be met in U-T years Operators Cost Structure P5 P6 P7 C5 C6 C7 P8 C8 h% Cost 1 P9 C9 Cost 2 P10 C10 b% Cost 3 g% Cost 4 f% Cost 5 e% Cost 6 d% SAC is borne by the DTH players affecting their c% Cost 7 profit margins substantially Source: DTH MARKET - INDIA.PPT 5
  6. 6. Drivers and Challenges Challenges Getting a share of the cable driven market and facing the new age IPTV Drivers Trapped in TRAI’s content guidelines The growing middle-class and rising Demand supply gap for transponders disposable income in a 7 player broadcast market Increasing television penetration and sale of LCD monitors Cap on Foreign Investments Price war and different package options attracting consumers Advantage over traditional cable operators DTH MARKET - INDIA.PPT 6
  7. 7. Key Trends Partnerships with movie Technological Innovations distributors Trends Combined retail of LCDs and Shift from price war to DTH connections offering exclusive VAS DTH MARKET - INDIA.PPT 7
  8. 8. Competition in the DTH market has grown with 6 players on a subscriber acquisition spree Overview Market Share by Volumes •Oligopolistic market structure •Competition is high as market is saturated LE with 6 private players and 1 free-to-air Company 5 provider namely DD Direct e% •Competition here like any infrastructure industry is about scale and volume capture MP Company 4 d% a% •Steep competition has led to a surge in advertising spend to improve penetration SA •With greater number of players in the market, Average Revenue Per User (APRU) will decline Company 3 c% Company 1 owing to price war and discounts •Company 6 is planning to move to a paid b% model increasing competition Company 2 Plans on offering 144 pay channels, 4 hi-definition channels and 50 radio channels •The scope for new entrants is limited as the challenge posed by high cost of CPE and the high costs entailed for leasing transponders Source: DTH MARKET - INDIA.PPT 8
  9. 9. Players in the Market (1/6) Company Snapshot: Company 1 Corporate Information Packages Offered Headquarters H1 Packages Cost (INR) Description P1 C1 D1 Established Oct 20- - P2 C2 D2 FY ’09: Revenue - INR - - mn; Loss – INR - - Financials P3 C3 D3 mn P4 C4 D4 Person 1 – Chairman P5 C5 D5 Key People Person 2 – MD Business Highlights Interactive Services Offered • Offers largest number of channels with focus on strong • Service 1 – Watch movies any time on demand regional content in linguistic zones L • It began providing up-front subsidy on set top boxes to acquire subscribers P E • Service 2 - Matrimonial & job search • Service 3 - Planning tours on TV via Yatra.com • Service 4 - Downloading mobile services M • Large sales and distribution network - A ‘Dish Shoppees’ to provide demo’s to prospective users (Jun ‘- -) and wide reach • Service 5 - TV banking with ICICI Bank to B towns and P dealers (Sep ‘- -) Company L in Nov ’- - SA • Received a PE investment of INR T bn through GDR from • Heavy capex investment has enabled the company to deliver a high end audio-video quality • Service 6 - Active worship • Service 7 - Astro forecasts and predictions • Service 8 - Interactive experience of sports/news • Service 10 - Address regional language needs Source: DTH MARKET - INDIA.PPT 9
  10. 10. Thank you for the attention The DTH Market - India report is a part of Research on India’s Media and Entertainment Series. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Gagan Uppal Phone: +65 8448 0449 Phone: +91 98364 71499 E-Mail: natasha.mehta@netscribes.com E-Mail: gagan.uppal@netscribes.com Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. DTH MARKET - INDIA.PPT 10

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